RIM cuts losses, treads water while waiting for BlackBerry 10 release

Sales even slimmer, but some companies have BB 10 in beta ahead of 1/30 launch,

Research In Motion executives announced the financial results of the company's quarter ending December 1. The good news for fans of the Waterloo, Ontario-based maker of the BlackBerry and PlayBook is that the company continued to reduce its hemorrhaging. RIM actually saw a slight increase in the sale of its PlayBook tablet.

The bad news is the company did so on less revenue, while shipping even fewer products than the last quarter and less than half the number of BlackBerry phones it sold this time last year. But if the BlackBerry 10 is even a moderate hit, RIM's improved financial performance could mean a return to profitability next year.

And there's reason to hope. "More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products," RIM CEO Thorsten Heins said in a prepared statement. "And beta trials of BlackBerry Enterprise Service 10 are underway at more than 120 enterprises, including 64 Fortune 500 companies." BlackBerry 10 launches on January 30.

In the meantime, the currently available inventory is not doing so well. RIM's revenue from September to December was $2.7 billion, five percent less than in the previous three months and slightly more than half the company's 2011 revenue for the same period of $5.2 billion. It shipped 6.9 million BlackBerry handsets, down from 7.4 million in the previous three months; in September to December in 2011, RIM shipped 14.1 million BlackBerries.

While the PlayBook's sales were up, they were still relatively anemic in comparison to the tablet's competitors. RIM shipped 255,000 PlayBooks in the last three months, nearly double the company's June-to-September shipment numbers.

Buried in the numbers is the continued financial turnaround being driven by CEO Thorsten Heins. The company's net income as a percent of revenue continues to climb, showing RIM continues to become more financially efficient in its operations.

Buried in the numbers is the continued financial turnaround being driven by CEO Thorsten Heins. The company's net income as a percent of revenue continues to climb, showing RIM continues to become more financially efficient in its operations.

That's really the best bit of news here. If Heins can continue this trend, while RIM hopes for a rejuvenated interest in BB product, 2013 might be a surprisingly good year for the company -- financially, at least. I abandoned BB for Android, but I am always happy to go back if BB gets back on course. Ecosystem be damned...I just want my keyboard back.

Who would buy the old phones when the new ones are around the corner? Announcing a new product and then being late is not a good business plan, especially when the new product has little fallback. Poor sales are to be expected.

I've been waiting and waiting for BB10.

BTW, you can get Android phones with keyboards. Not a keyboard as good as a Blackberry. I'm on a 9870, but have a HTC G2 gathering dust.

Who would buy the old phones when the new ones are around the corner? Announcing a new product and then being late is not a good business plan, especially when the new product has little fallback. Poor sales are to be expected.

I've been waiting and waiting for BB10.

BTW, you can get Android phones with keyboards. Not a keyboard as good as a Blackberry. I'm on a 9870, but have a HTC G2 gathering dust.

Several contract free/pay as you go recently upgraded to the 9310, I'm sure their customers would be upgrading considering they're unlikely to see anything BB10 for a while.

Of course it took gross incompetence to get to the position they are in, but maybe they will get through it. I certainly don't want to have the market collapse down to just iOS and Android (close as it already is to that outcome).

While they didn't do quite as badly as expected, they still did badly. While cash increased, it did so because of sell offs of plant and equipment, as well as property, and layoffs. This isn't a good reason. While they look to have enough to release BB10 products, and have a lot of carriers in testing, that doesn't mean they will be selling a lot of this product.

I read a lot of financial reports and analysis, and I see an error in almost all of them. They assume that because a company is coming out with a revised line of products, it means that that line will automatically sell well. When a company states that its doi g this or that which will result in a good gain, it's assumed that it will be so, and is reported that way.

I see the same thing here. RIM is doing terribly. There is no question of that. They are being pushed out of all their profitable markets,, and it's not likely they will ever move in again. Even in a number of the third world countries where they have been touting sales and marketshare, they are faltering. $2.9 billion sounds like a lot, but it's just a tiny fraction of what their more successful competitors have, and RIM will need every penny. BB10 will require massive marketing, and that can cost hundreds of millions. If they choose not to do that, they will have a problem. The problem with marketing is that the smallest competitors need to keep up with the big boys. This year, Samsung is the 600 pound gorilla in marketing, spending almost $12 billion worldwide, as opposed to Apple's billion. Where will RIM fit into that?

Just because a company isn't doing as well as its multi-billiion dollar competitors doesn't mean that it can't still turn a profit. While the smartphone business is tight, it appears that it's really not just a two-system market for Android vs. iPhone like everyone thought it was going to be for the last three years.

RIM might end up a distant third but it can still be a third with a very strong niche for them to hang on to.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

The problem with marketing is that the smallest competitors need to keep up with the big boys. This year, Samsung is the 600 pound gorilla in marketing, spending almost $12 billion worldwide, as opposed to Apple's billion. Where will RIM fit into that?

Samsung advertises much more widely than Apple does, so 12 billion spread over many markets might not be as big a different as it sounds. RIM just needs to be smart about where they spend their money. If BB10 is a smoother transition than Symbian -> Windows Phone, I could see them holding onto established customers with much less spending than Samsung. I think comparing phone maker to Sammy and Apple, while an understandable instinct, is a big mistake. They're the outliers, not the baseline for success; RIM can be ok with much lower sales/profits.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Yeah, I'll miss RIM too. Its too bad they didn't recognize a while back that they were a software service provider and not a hardware and OS provider like Nokia, Samsung, LG, Sony and others realized. RIM could have produced a secure version of Android or WP, but instead insisted on controlling the whole widget, but with only a fraction of the resources and technical know-how of a Microsoft or Apple.

While cash increased, it did so because of sell offs of plant and equipment, as well as property, and layoffs. This isn't a good reason.

While I know it's futile asking you for proof of this statement, but as RIM made no mention of this in the press release nor the earnings call I'm curious on how you came across this knowledge.

I can't offer any proof other than the fact that my company has been actively recruiting in RIM territory for the past year and a half, and a lot of my co-workers are former RIM now. They all have similar stories, management there is apparently quite terrible even since the change, and the cuts are in R&D and engineering more than anything else. Not a great recipe for long term success. In some departments, managers now outnumber engineers according to a lot of them. Apparently they can manage a product up from the ether, no actual coding needed.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

I'm always amazed that rim continues to make money. Another 600m in straight cash.

The bigger news is subs dropped for the first time in almost forever

What dreadful reading comprehension you have. They lost $100 million, but sold of $700 million worth of assets, investments, and inventory, causing their cash to increase as they lose money. RIM does NOT "make money".

RIM's task is near impossible because they need so much more than for BB10 to be a moderate hit.

The first problem is they are building hardware and a software platform, which requires monumental continued investments as well as a patent war chest that includes general OS intellectual property, not just mobile. The R&D alone to be a sustained competitor against the big players is likely equal to their entire sales number, let alone profits.

Second problem is that it may take years to build momentum. Look at Microsoft and Google who already have years invested and are barely matching Apple's effort.

Finally since they have the smell of death on them companies will be more likely not to invest. Same with top engineers, who would take a job offer from them without a 3-5 salary contract that was backed by separately funded source?

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

And there will be no number 4 surviving for long.

MS has been known to thrown in the towel, even if they can afford to burn money. Or are they still selling Zunes in Pago Pago?

MS would probably buy RiM rather than spend resources to beat it if Windows phone fails.

Of course it took gross incompetence to get to the position they are in, but maybe they will get through it. I certainly don't want to have the market collapse down to just iOS and Android (close as it already is to that outcome).

They give away obsolete phones below cost in the third world. If it amazes you that this leads to a few sales, you should be very interested in Nokia.

Just because a company isn't doing as well as its multi-billiion dollar competitors doesn't mean that it can't still turn a profit. While the smartphone business is tight, it appears that it's really not just a two-system market for Android vs. iPhone like everyone thought it was going to be for the last three years.

RIM might end up a distant third but it can still be a third with a very strong niche for them to hang on to.

RIM isn't just not doing as we'll as their peers. They have been losing money for some time. There isn't a lot of evidence to suggest that there's room for three in smartphones. Right now the only profitable smartphone companies are Apple and Samsung. HTC breaks even. The rest lose money.

The problem with the idea of RIM surviving as a niche player is that RIM's customers- governments and big business- aren't niche customers. They want to and will switch to industry standards ie. not RIM.

Who would buy the old phones when the new ones are around the corner? Announcing a new product and then being late is not a good business plan, especially when the new product has little fallback. Poor sales are to be expected.

I've been waiting and waiting for BB10.

BTW, you can get Android phones with keyboards. Not a keyboard as good as a Blackberry. I'm on a 9870, but have a HTC G2 gathering dust.

All the keyboard-bearing androids are second-class phones, at best. No one has a flagship-grade QWERTY phone.

Just because a company isn't doing as well as its multi-billiion dollar competitors doesn't mean that it can't still turn a profit. While the smartphone business is tight, it appears that it's really not just a two-system market for Android vs. iPhone like everyone thought it was going to be for the last three years.

RIM might end up a distant third but it can still be a third with a very strong niche for them to hang on to.

The US market penetration for smart phones is only 50%. Pretty much anyone that wanted an iphone already has one. (Based on my observations, the only platform switchers are those leaving IOS.) Worldwide, there is plenty of room to grow. (Remember has everyone was amazed Nokia managed to sell anything? Well they didn't sell in the US.) If you read Bloomberg, the fight for the 3rd world smartphone market is very competitive. Take Nigeria for instance. When I read about the fight for the Nigerian market, I thought WTF. It turn out Nigeria is a large country (170 million). In the 3rd world, they need phones that work without desktop support. While Apple had some OTA, RIM does OTA very well. Further, they toss in the secure messaging for free (no data plan). Over the years, BBM has become multimedia, not just text. You can even VOIP your BBM contacts.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

And there will be no number 4 surviving for long.

MS has been known to thrown in the towel, even if they can afford to burn money. Or are they still selling Zunes in Pago Pago?

MS would probably buy RiM rather than spend resources to beat it if Windows phone fails.

Bad example, the Zune evolved into Windows Phone. MS does throw in the towel, but its unlikely to be anytime soon. WP is only two years old, MS was willing to lose billions on Xbox for 6 years before turning a profit, and WP costs them a fraction of what that effort did, and the market is a more important one to establish themselves in than gaming was.

Just because a company isn't doing as well as its multi-billiion dollar competitors doesn't mean that it can't still turn a profit. While the smartphone business is tight, it appears that it's really not just a two-system market for Android vs. iPhone like everyone thought it was going to be for the last three years.

RIM might end up a distant third but it can still be a third with a very strong niche for them to hang on to.

RIM isn't just not doing as we'll as their peers. They have been losing money for some time. There isn't a lot of evidence to suggest that there's room for three in smartphones. Right now the only profitable smartphone companies are Apple and RIM. HTC breaks even. The rest lose money.

The problem with the idea of RIM surviving as a niche player is that RIM's customers- governments and big business- aren't niche customers. They want to and will switch to industry standards ie. not RIM.

Um, where did you get that only Apple and RIM are profitable? Samsung is profitable as are several others. In fact I seem to remember Samsung being #2 after Apple in terms of revenues, although far behind them in terms of profits.

Dec. 20 (Bloomberg) -- Research In Motion Ltd. has doubled in value over the past three months while Apple Inc. shares have slumped, a turnabout that has rewarded investors such as Renaissance Technologies LLC.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

And there will be no number 4 surviving for long.

MS has been known to thrown in the towel, even if they can afford to burn money. Or are they still selling Zunes in Pago Pago?

MS would probably buy RiM rather than spend resources to beat it if Windows phone fails.

Bad example, the Zune evolved into Windows Phone. MS does throw in the towel, but its unlikely to be anytime soon. WP is only two years old, MS was willing to lose billions on Xbox for 6 years before turning a profit, and WP costs them a fraction of what that effort did, and the market is a more important one to establish themselves in than gaming was.

But the X-box didn't suck! Ok, it had reliability issues, but MS was nice about replacing them.

The Zune is a windows phone as much as a carrot is a potato. Yeah, the both grow underground and you can eat them, but that is where the similarity ends.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

And there will be no number 4 surviving for long.

MS has been known to thrown in the towel, even if they can afford to burn money. Or are they still selling Zunes in Pago Pago?

MS would probably buy RiM rather than spend resources to beat it if Windows phone fails.

Bad example, the Zune evolved into Windows Phone. MS does throw in the towel, but its unlikely to be anytime soon. WP is only two years old, MS was willing to lose billions on Xbox for 6 years before turning a profit, and WP costs them a fraction of what that effort did, and the market is a more important one to establish themselves in than gaming was.

But the X-box didn't suck! Ok, it had reliability issues, but MS was nice about replacing them.

The Zune is a windows phone as much as a carrot is a potato. Yeah, the both grow underground and you can eat them, but that is where the similarity ends.

But thanks for playing!

What sucked about the Zune? People who owned them still lament that it was replaced by WP without carrying over all its features. The Zune design language(Metro/Modern) carried over, the first version of WP was based on the same technical underpinnings, the UI is the same, the Zune even had an app store at the end that used pretty much the same model.

Hell, its fair to call the first iteration of WP Zune plus phone functionality.

Here's what's eerie. I've never owned a BlackBerry. Or used one. Looked over a couple of people's shoulders. I've been a Mac user for a long time, and have 4 iPhones (family members) attached to my name (two of them 5's already).

But I read this, and I find myself wanting to go out and try one and give it the benefit of the doubt. I find myself *wanting* RIM to succeed, because they're so much in the underdog-fighting-for-life position, and they haven't done anything to irritate me (plus I have a long term affinity for QNX).

Just because a company isn't doing as well as its multi-billiion dollar competitors doesn't mean that it can't still turn a profit. While the smartphone business is tight, it appears that it's really not just a two-system market for Android vs. iPhone like everyone thought it was going to be for the last three years.

RIM might end up a distant third but it can still be a third with a very strong niche for them to hang on to.

RIM isn't just not doing as we'll as their peers. They have been losing money for some time. There isn't a lot of evidence to suggest that there's room for three in smartphones. Right now the only profitable smartphone companies are Apple and Samsung. HTC breaks even. The rest lose money.

The problem with the idea of RIM surviving as a niche player is that RIM's customers- governments and big business- aren't niche customers. They want to and will switch to industry standards ie. not RIM.

Um, where did you get that only Apple and RIM are profitable? Samsung is profitable as are several others. In fact I seem to remember Samsung being #2 after Apple in terms of revenues, although far behind them in terms of profits.

Obviously I meant Samsung and I have edited my post. No other handset vendors are profitable (well technically HTC is, but their profits are negligible) , unless they are back stopped by other businesses such as Googlerolla.

Who would buy the old phones when the new ones are around the corner? Announcing a new product and then being late is not a good business plan, especially when the new product has little fallback. Poor sales are to be expected.

I've been waiting and waiting for BB10.

BTW, you can get Android phones with keyboards. Not a keyboard as good as a Blackberry. I'm on a 9870, but have a HTC G2 gathering dust.

All the keyboard-bearing androids are second-class phones, at best. No one has a flagship-grade QWERTY phone.

For that matter, is there even a Windows Phone 8 model with a keyboard?

It seems weird to me that this segment is completely ignored. I can accept that the majority may value thinness over a keyboard, but I would think manufacturers would be looking at this segment and thinking they could totally claim it as their own.

I'm always amazed that rim continues to make money. Another 600m in straight cash.

The bigger news is subs dropped for the first time in almost forever

What dreadful reading comprehension you have. They lost $100 million, but sold of $700 million worth of assets, investments, and inventory, causing their cash to increase as they lose money. RIM does NOT "make money".

This (and the mention of layoffs) sort of answers my initial question. Now I just wonder what (if any) impact these cutbacks will have on RIM's future success.

RIM is pretty much almost profitable with 1.5 year old phones, just wait until they actually have new phones that people want to pay $600 for.

The cost cutting was almost 5000 jobs, had to be done, the Java developers in Waterloo were let go, the QNX team in Ottawa is expanding and hiring for C++/QT devs. They are doing everything right in the transition to BB10, unlike Nokia they still support and sell their previous platform, they just added free voice calling to BBM over Wifi, a huge win for consumers in emerging markets and elsewhere.

Who would buy the old phones when the new ones are around the corner? Announcing a new product and then being late is not a good business plan, especially when the new product has little fallback. Poor sales are to be expected.

I've been waiting and waiting for BB10.

BTW, you can get Android phones with keyboards. Not a keyboard as good as a Blackberry. I'm on a 9870, but have a HTC G2 gathering dust.

All the keyboard-bearing androids are second-class phones, at best. No one has a flagship-grade QWERTY phone.

For that matter, is there even a Windows Phone 8 model with a keyboard?

It seems weird to me that this segment is completely ignored. I can accept that the majority may value thinness over a keyboard, but I would think manufacturers would be looking at this segment and thinking they could totally claim it as their own.

I thought I'd miss the hardware keyboard on my Touch Pro II, but honestly Windows Phone has a fantastic software keyboard, I haven't missed the hardware one at all. I think that for most, software keyboards have passed the 'good enough' test. There were two hardware keyboards on WP7 devices, the Dell Venue Pro and the HTC Arrive. Neither sold well at all. The niche exists, but I don't know that its sustainable economically.

Two companies found themselves in roughly the same position. One tries to use the same innovative talents it used to get itself into a pre-eminent position to fix the problem. The other decides to fly the white flag, give up on the people who put it on top of the totem pole and use someone else's technology.

One of those companies is now as good as dead. The other - well there is still hope, and I for one wish them all the best.

Which is which? Nokia stock just almost doubled because Lumia phones seem to be doing pretty well. Even though I completely agree with the "fly the white flag" comment and would have wished Nokia to have some balls and strategic vision 3-5 years ago to build a good Linux based OS and focus on it (which they did but too late) they at least have a chance now.

RIM? Not so much. Yes they are doing better financially which means they fire people and cut the pay of others but their sales tank and I really really doubt they will be the number 3 in the market. They are too small and Microsoft has too much resources available. So however awesome BB10 will be the network is just not there. MS doesn't have it as well but they have a bigger extended ecosystem and billions and billions of profit from Windows and Office to burn.

And there will be no number 4 surviving for long.

MS has been known to thrown in the towel, even if they can afford to burn money. Or are they still selling Zunes in Pago Pago?

MS would probably buy RiM rather than spend resources to beat it if Windows phone fails.

They have thrown the towel repeatedly that is true.plays not for sure for example but this time is different they bet house farm and staple on the metro crap. Its the next gen of windows its their phone os hell even the latest Xbox looks like it. No hedging bets this time they are all in and if it fails they are really really screwed. Not sure if I like it I prefer android and iOS but they will throw all of their significant resources at it to make it work.

Sean Gallagher / Sean is Ars Technica's IT Editor. A former Navy officer, systems administrator, and network systems integrator with 20 years of IT journalism experience, he lives and works in Baltimore, Maryland.